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Tuesday, June 9, 2015

EVEN BIGGER MEGA SHIPS

While the economic value of mega ships is unconfirmed beyond who has the deepest pockets to buy these ships and weather a rate battle, now this--

Following the recent order by Maersk Line of eleven 19,630 teu vessels, it appears that plans are under development for the next jump in container ship sizes.
Speaking at the TOC Container Supply Chain conference in Rotterdam today, Andrew Penfold, project director at Ocean Shipping Consultants, told delegates that designs for vessels in excess of 20,000 teu had become quite advanced.
“We have been working closely with [ship classification society] Lloyd’s Register and can confirm that there is no technical reason why ships cannot go above 20,000 teu – and we have very serious discussions about vessels of 22,000 teu.
“In all likelihood these vessels will be longer than current sizes, rather than beamier,” he added.
“After that, there may be a pause in ordering greater vessel sizes, although I would imagine it will ultimately resume again,” he added.
Maersk Line’s head of network and procurement in north Europe, Hans Augusteijn, said the dimensions of the recent Maersk order were due to the carrier’s assessment of where demand and supply on the Asia-Europe was heading.
“The reason that Maersk Line has decided to order vessels of 19,630 teu size is that it was appropriate to keep up with the market growth. But we didn’t want to go beyond that because we wanted to grow in line with how we expect the trade to grow.”
He added that issues with berth productivity at terminals were also a mitigating factor, in that although average berth productivity had increased globally in terms of the gross number of crane moves per hour, these increases had not kept pace with increasing vessel dimensions.
Mr Penfold added that as had previously been the case, an increase in vessel sizes inevitably led to more containers being exchanged in a single vessel call, and that larger vessels would place even further pressure on terminals.
His predictions came with a caveat, however, as the bout of orders for 18,000 teu-plus ultra large container vessels (ULCVs) had come so shortly after a series of smaller 12,500-13,000 teu vessels had been speculatively ordered by non-operating shipowners, which could affect vessel operating costs.
“Since the 18,000 teu vessel is so much more economic than a 12,500 teu vessel, there will be a pressure on some of these non-operating shipowners to offload these assets if they can’t find employment for them.
“Should these vessels be sold as distressed assets and picked up very cheaply by operators, it could well be that they suddenly become more cost-effective than the bigger vessels.
“The economics can be very complicated,” Mr Penfold said